Sales of second-hand cars fell 1.1 per cent last year as the car-buying slump hit the used as well as the new market, official data showed today.

Some 8.2million used cars changed hands in 2017, the Society of Motor Manufacturers and Traders revealed, which is 87,000 fewer than the year previous.

The motor industry is feeling the backlash of the government's recent tax crackdown on diesel cars which pushed new car sales down by 5.7 per cent over the same period.

Used car sale slide: The Society of Motor Manufacturers on Wednesday confirmed that second-hand vehicle transactions had dipped in the final months of 2017

Despite the drop off, the SMMT said that the 'used car market remained strong in 2017', and said the overall decline in transactions was impacted by a 5.1 per cent fall in second-hand car buying activity in the final three months of the year.

This fourth quarter dip saw figures slip below the previous year's record of 8.2 million used car sales, it said.

It means despite a collective slump, 2017 was still the second highest year of activity for dealers since records began.

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However, SMMT ceo Mike Hawes said the more substantial declines in new vehicle sales would also have an impact on the second-hand market and called for the government to boost confidence in the sector, especially when it comes to diesel.

In Wednesday's statement, Hawes commented: 'While such healthy demand is reassuring, to keep it that way and accelerate renewal throughout the fleet – the fastest way to improve air quality – government must now restore confidence to the new car sector.

'Given the recent economic and fiscal uncertainty, particularly over diesel, consumers and businesses need clarity to encourage them to move out of their older vehicles and into newer, lower emission cars – whatever their fuel type.'

Official figures showed that 87,000 fewer second-hand models were bought in 2017 compared to the year previous

Despite the ongoing demonisation of the fuel type, used diesel transactions rose 3.3 per cent last year.

More than 3.3 million motorists invested in an oil burner despite the recent tax surcharge threat, meaning two in every five second-hand car was powered by the under-fire fuel type.

Some 58 per cent of used cars bought last year were petrol powered - a decline of 4.3 per cent - while alternative fuel vehicles made up the remaining 1.2 per cent of the market.

While the latter figure suggest appetite is low for low-emissions models, the limited availability of hybrid and electric cars on the market may be restricting demand.

The SMMT said 73,864 of the used cars changing hands last year were petrol-electric hybrids, while 10,199 second-hand pure electric models found new homes during 2017.

Nathan Coe from Auto Trader - the nation's biggest used and new car sales website - said sales had started strongly in 2017 but were strangled by VED changes introduced in April that saw the cost of taxation increase for new cars and supply to the second-hand market decline.

However, it said demand has seen the average price of used cars increase and was buoyed by the uptake in previously-owned diesel cars.

'Prices of used cars have continued to increase over the year, as measured by Auto Trader’s Retail Price Index which shows the average price for a used car in 2017 was £11,819, an increase of 4 per cent compared to 2016', Coe said.

He added: 'In what’s been a turbulent year for diesel new car sales, it’s interesting to see that used car sales of diesels actually rose 3 per cent whilst petrol declined 4 per cent.

'The growth was in the SUV category and may suggest people changing for newer, cleaner diesels.

'That said, with local councils looking to implement green tax levies for older diesel vehicles, consumers are beginning to favour petrol or alternative fuel types for smaller city cars and hatch backs to avoid these additional driving levies.

'When we look at prices of used diesels they actually recorded an average price of £13,944 in 2017, a like-for-like price growth of 2% for the year, whilst a petrol car was £9,471, an increase of 7% on the previous year.'

More second-hand cars were bought in the South East of England than any other region, the SMMT said

While SUV sales were up by 9.5 per cent, it was superminis that dominated the market, representing a third of all second-hand cars bought last year.

In terms of locality of transactions, the majority of used cars changed hands in the South East, with more than 1.2 million vehicles finding new owners in the region, followed by the North West and West Midlands.

The Ford Fiesta was at the top of the sales table, replicating its success in the standings for new car registration in 2017

The UK’s best-selling used model remained the Ford Fiesta, closely followed by the Ford Focus and Vauxhall Corsa.

While Coe acknowledged industry forecasts suggesting declines in the new car market in 2018, he said drivers were still showing plenty of appetite for used vehicles in the first weeks of this year.

'As we've seen on our marketplace already this year, there’s a high level of consumer interest for vehicles, with nearly 146 million vehicle searches conducted in January alone, and as finance continues to be a key purchase driver, there remains real opportunity within the used car market,' Coe said.

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